What is ideal HR cost to business revenue

Question

Accepted Answer

The ideal HR cost to business revenue varies depending on the industry, company size, and business strategy.

There is no one-size-fits-all answer to this question as it depends on various factors.
In general, HR costs should be aligned with the company's revenue and growth goals.
A common benchmark is to aim for HR costs to be around 10-15% of the total business revenue.
However, this percentage can vary significantly based on industry norms and company-specific requirements.
For example, a technology startup in its early stages may allocate a higher percentage of revenue to HR to attract and retain top talent.
On the other hand, a mature manufacturing company with stable workforce needs may have lower HR costs.
It is important for HR professionals to regularly assess and optimize HR costs to ensure they are providing value and contributing to the overall business success.

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